A complete and clear discussion of foreclosures is totally missing from the presidential election campaign but that’s not the case in Connecticut’s Senate race, a contest where both candidates have faced foreclosure.
Republican Senate candidate Linda McMahon went bankrupt in 1976, re-started her life and is now the CEO of the wrestling and entertainment super-power, the WWE, or World Wrestling Entertainment.
“Financially,” says Wikipedia of Ms. McMahon and her husband, Vince, “the couple fared poorly for several years, and in 1976, while pregnant with Stephanie, Linda and her husband filed for bankruptcy. They also briefly received food stamps, until her husband took on a 90-hour a week job at a quarry.”
At the same time, wrote the Boston Herald, “the McMahons sought protection in April 1976, three months after the Connecticut Bank and Trust Co. foreclosed on their West Hartford home, on which they owned $133,167. The house was auctioned for $147,500 in October 1976.”
Not to be outdone, Democratic candidate Rep. Christopher Murphy nearly lost his home to foreclosure in 2007. The Hartford Courant reported that Murphy, an attorney, was making $77,000 a year when he won a congressional seat in 2006. However, campaigning was expensive; he racked up a large number of debts, and then was foreclosed.
“Murphy was sued for failing to pay his mortgage,” said the Courant. “Documents show that by the end of 2006, he continued to have no liquid assets. Murphy represented himself in the foreclosure action, which was filed in Superior Court in New Haven. The matter was resolved and withdrawn two months later. As a member of the House, he made $165,200 in 2007.”
You can safely imagine that each candidate is questioning the financial talent of the other. One result is that McMahon is repaying her debts from the 1976 bankruptcy — something she is not required to do. But it’s okay, she’s doing a little better now, as evidenced by her ability to invest $65 million in two tries for a Senate seat.
While the Connecticut race is all about finances and redemption, what about the national campaign? Hardly a word is said — and certainly not a substantive word — regarding foreclosures, short sales or bank-owned REOs. The housing sector used to be 20 percent of the economy and yet it’s now a non-factor in the national race.
That’s a shame because foreclosures and bankruptcies raise a lot of questions. For instance, in 1978 — two years after Ms. McMahon went bankrupt — the law was changed so that bankruptcy judges could no longer modify the mortgages on single-family homes but they could reduce the debt on second homes and yachts. Would Ms. McMahon have been able to get back on her feet with today’s bankruptcy rules? As a Senator would she favor a return to the standards which helped her get a new start?
As to Rep. Murphy, if he moves up to the Senate will he support Wall Street reform as it is now written with its new standards for lenders? If not, what would he specifically change and how would he hold down foreclosure levels?
These are questions not just for Connecticut voters but for voters everywhere, stuff that should be at the center of the presidential election.